Tax evasion and relative tax contribution

Producción científica: Contribución a una revistaArtículoInvestigación

8 Citas (Scopus)

Resumen

This article analyzes the relationship between tax rate levels and tax evasion in a context where the utility of a taxpayer depends on both his or her own consumption and relative position with respect to the average declared income of the economy. In this framework, if the taxpayer declares an amount of his or her income greater (smaller) than the average of the economy, that person’s utility will decrease (increase). The author shows that, if the externality from the others’ declared income is taken into account, several equilibria arise in the economy. Then, an increase in the tax rate leads to a larger amount of unreported income at the equilibrium displaying the lowest income reports. This comparative statics result agrees with most of the existing empirical evidence.
Idioma originalInglés
Páginas (desde-hasta)183-195
Número de páginas15
PublicaciónPublic Finance Review
Volumen32
N.º2
DOI
EstadoPublicada - 1 mar 2004

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